S-14 A SPECIAL SUPPLEMENT TO DC VELOCITY

frequent shipments to stores. In other cases, he says, retailers are asking suppliers to manage some e-commerce fulfillment from their facilities. “If you decide to go to servicing e-commerce from a DC associated with manufacturing, that’s a big change for the manufacturer,” he says.

OMNISCIENT SYSTEMS?

Putting all the pieces together—inventory management
and visibility, a fulfillment strategy that has inventory in the
right place at the right time, integrating DC and store oper-
ations—requires robust systems. Retailers face the challenge
of blending multiple systems—corporate enterprise resource
planning (ERP) systems, DCs’ warehouse management sys-
tems, stores’ inventory systems—to provide a single view
of inventory and then creating a single fulfillment engine.
“That’s our number one challenge,” Khodl says. “It’s a data
challenge. It’s not a fulfillment challenge.”
“Systems are evolving toward making decisions dynami-
cally versus having long batching and planning cycles,” says
Koch.

Referring again to his recent customer visit, Koch says the
systems discussion centered on how software should view
inventory—as a shared pool for all channels or as a single
pool. “Our answer is that you have to look at it as a shared
pool that you are going to execute orders against, and you
don’t care if it’s case, “each,” direct to consumer, or shipped
to the store,” he says. “You can plan your execution against it
and make your allocations against the same inventory pool.”
Omnichannel implementation, retailers have come to
understand, allows them to strengthen their hand in the
battle for consumer hearts and dollars by taking advantage
of assets the big online giants don’t have—their stores. Yet
implementing the strategy remains a daunting challenge.

“I don’t know if anyone has quite figured it out,” Khodl says. “Everyone is searching.”

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